D was a loan shark who was convicted under the Consumer Credit Protection Act which prohibited extortionate credit transactions.
D argued that the CCPA was an unconstitutional use of Commerce Clause power since there was no interstate activity.
Procedural History:
SCOTUS held CCPA constitutional.
Issues:
Is Congress's enactment of the CCPA a valid use of Commerce Clause power?
Holding/Rule:
Congress's enactment of the CCPA is a valid use of Commerce Clause power because Congress had a rational basis to believe that the conduct they were seeking to prohibit had an effect on interstate commerce.
Reasoning:
The Commerce Clause reaches three categories of problems…
The use of channels of interstate or foreign commerce which Congress deems are being misused. (the shipment of stolen goods or of persons who have been kidnapped)
Protection of the instrumentalities of interstate commerce. (destruction of aircraft)
Those activities affecting commerce (loan sharks)
Extortionate credit transactions, though purely intrastate, may in the judgment of Congress affect interstate commerce.
The reports before Congress supplied them with knowledge that the loan shark racket provided organized crime with its second most lucrative source of revenue; that they took millions from people and caused the takeover of legitimate businesses.
Loan sharking is one way that organized interstate crime finances it national operations.
Dissent:
Stewart
Under this interpretation, a person can be convicted without any proof of interstate movement, of the use of interstate facilities, or of facts showing that his conduct affected interstate commerce. The framers would not be happy.
It is not enough to say…
That loan sharking is a national problem for all crime is a national problem.
That some loan sharking has interstate characteristics for any crime may have an interstate setting.
That the circumstance that loan sharking has an adverse impact on interstate business is not a distinguishing attribute for interstate commerce suffers from almost any criminal activity.
The 9th and 10th Amendments reserve to the states the right to define and prosecute local and intrastate crime.
